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Cap and trade

Photo: Hindustan TimesPremium
Photo: Hindustan Times

A workable way out would be to create a limited set of emission rights that reduce gradually in accordance with our targets, and which industrial units must buy at prices determined by demand and supply

India has reportedly set up an interministerial committee that will monitor an action plan to achieve our climate change mitigation goals, as committed under the 2015 Paris Agreement. The Apex Committee for Implementation of Paris Agreement is expected to act as a national authority for the regulation of a carbon market in India. Its mandate would be to formulate guidelines for projects and carbon pricing, which is vital if a market mechanism is to help us reduce gas emissions that cause global warming.

We need to drastically cut down the volume of pollutants spewed into the atmosphere. From an economic perspective, it’s unrealistic to choke all carbon pollution right away. A workable way out would be to create a limited set of emission rights that reduce gradually in accordance with our targets, and which industrial units must buy at prices determined by demand and supply. This way, cost-conscious firms would be incentivized to achieve carbon neutrality. Those that actually clean the air should get carbon credits they could monetize. With Joe Biden set to lead the US, hopes have soared that a global market for carbon kicks off and helps save the planet.

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